The sale of cars and tours to sunny countries has rarely been higher despite an economic downswing in Iceland, the current credit crunch and plummeting stock prices. According to Toyota Iceland, most of the nation has been left untouched by these economic fluctuations.
“The public is not experiencing the depression written about in the papers personally. Most of them are not investing in stocks or thinking about the risk of exchange rates,” managing director of Toyota in Kópavogur, Haraldur Thór Stefánsson, told Morgunbladid.
“The sale of cars, four-wheelers and snowmobiles is good and I don’t see any signs of change in the near future,” Stefánsson added.
During the first two months of 2008 the sale of passenger vehicles increased by 43 percent compared with the same period last year. The sale of tours to foreign destinations is also performing well.
“We have two airplanes for Tenerife and two airplanes for Las Palmas every week and tours are sold out until late spring. Summer sales are also in full swing,” said Gudrún Sigurgeirsdóttir, marketing director of Úrval-Útsýn travel agency.
Private consumption in Iceland decreased in the first quarter of 2007, which was the first time in five years that Statistics Iceland had noticed a decrease in that arena. But it was only temporary as since then, private consumption has been on a steady increase.
According to statistics from the Central Bank of Iceland, credit card turnover of individuals in January 2008 increased by 7.5 percent compared to January 2007.
Growing private consumption is partly fueled by loans. Icelanders owed almost ISK 868 billion (USD 13.1 billion, EUR 8.6 billion) in debt at the end of January 2008; a 38 percent year-over-year increase. Debt in foreign currencies grew even faster; by 119 percent year-over-year.